Hammond Power Solutions Inc. to Acquire AEG Power Solutions

Core Viewpoint - Hammond Power Solutions Inc. (HPS) has signed a definitive agreement to acquire AEG Power Solutions for an enterprise value of C$365 million, aiming to enhance its growth strategy and market presence [1][6][8]. Strategic Rationale - The acquisition is expected to strengthen HPS's portfolio and market reach through product expansion by integrating HPS's transformer capabilities with AEG's industrial UPS and power conversion expertise [3]. - It will increase exposure to high-growth markets such as industrials, infrastructure, and energy transition applications [3]. - The deal will provide geographic expansion opportunities, supporting diversified growth across multiple regions [4]. - HPS will benefit from an expanded customer base, leveraging AEG's large installed base and global aftermarket services to increase recurring revenue [4]. Transaction Details - The acquisition will be an all-cash transaction, with HPS repaying AEG's outstanding bank debt [6]. - The transaction is expected to be accretive to adjusted earnings per share in the first full year following closing, with anticipated returns on invested capital exceeding HPS's cost of capital [6][7]. - The deal is subject to regulatory approvals and is expected to close in the second quarter of 2026 [8]. Company Background - HPS is a leading provider of dry-type transformers and power quality solutions, with a focus on electrification through a broad range of products [15]. - AEG Power Solutions is a global manufacturer of mission-critical industrial power electronics, generating approximately C$326 million in revenue in 2025 [2].